Carvana declines following exchange offer; CommScope turns positive; QVC under pressure

By Cristal Cody

Tupelo, Miss., July 19 – Carvana Co.’s bonds went out lower on Wednesday with some of its paper still holding onto gains after the company surprised the market with a handful of major announcements, including an exchange of its senior junk bonds.

Carvana’s 10¼% senior notes due 2030 (Ca/CCC-) dropped about 3¼ points over the session and were down 5 points on the week.

Carvana’s other notes remained stronger on the week.

The 5½% notes due 2027 (Ca/CCC-) shaved off more than 5 points from Tuesday but were up about 2½ points from Friday.

Carvana’s stock rallied more than 40% on Wednesday in heavy trading.

CommScope Holding Co., Inc.’s bonds edged higher on Wednesday after shedding about 1½ points to 2½ points in heavy trading on Tuesday after a downgrade from Deutsche Bank.

CommScope’s 8¼% senior notes due 2027 (Caa1/CCC+) recovered ¼ point after dropping 2½ points in the prior session.

Stocks moved off the morning’s gains as volatility climbed, while crude oil came under pressure.

The S&P 500 index closed up 0.24%, the Nasdaq rose 0.03% and the Dow Jones industrial average added 0.31%.

The iShares iBoxx High Yield Corporate Bond ETF improved 6 cents, or 0.08%, to $75.51.

The CBOE Volatility index was up 3.46% at 13.76.

In other distressed paper, QVC Inc.’s notes were under pressure over the session.

The 5.45% senior secured first-lien notes due 2034 (B2/B-) gave back 1 point.

Carvana notes decline

Carvana’s 10¼% senior notes due 2030 (Ca/CCC-) dropped to 79 bid going out on Wednesday after gaining in the morning, sources said.

The notes traded as high as an 84 bid handle, up from 82¼ bid on Tuesday after declining from 84 bid on Monday.

The issue has rebounded from trading with a handle in the low 50s in March.

The 5½% senior notes due 2027 (Ca/CCC-) moved down to 69¼ bid in active trading from 75 bid the previous day but still up from where the paper went out in the prior week at 66¾ bid.

Carvana’s other notes also remained stronger on the week.

The 4 7/8% senior notes due 2029 (Ca/CCC-) traded in the 60¾ bid to 62 bid area on Wednesday and went out at 62 bid.

The notes traded early in the session 10 points better from where it went out on Friday at 55¾ bid.

Meanwhile, Carvana’s stock (Nasdaq: CVNA) closed 40.2% higher at $55.80 in heavy secondary action.

Carvana on Wednesday released its second-quarter results and said it had its best quarter on record.

The Tempe, Ariz.-based online car retailer also filed to sell $1 billion of its class A common stock, announced an exchange offer and agreement to eliminate more than 83% of its senior notes and reduce its total outstanding debt by more than $1.2 billion and started a tender offer to purchase some of its 2025 notes.

Carvana plans to exchange its existing senior notes for up to $4.376 billion in three tranches of new notes.

CommScope edges up

CommScope’s 8¼% senior notes due 2027 (Caa1/CCC+) recovered ¼ point to 77 bid by the close on Wednesday, a source said.

The bonds were quoted down 2½ points on Tuesday.

The Hickory, N.C.-based network infrastructure manufacturer’s stock (Nasdaq: COMM) closed the day down 1.76% at $5.02.

QVC softens

QVC’s 5.45% senior secured first-lien notes due 2034 (B2/B-) declined 1 point over the session to 50¼ bid on Wednesday, a source said.

The home shopping network company’s notes have improved modestly from a 49 handle a month ago.

West Chester, Pa.-based parent Qurate Retail Inc.’s stock (Nasdaq: QRTEA) rose 2.91% on the day to $1.06.

Distressed index improves

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns increased on Tuesday to 0.03% from minus 0.51% on Monday.

Month-to-date total returns rose to 1.64% versus 1.6% at the week’s start.

Year-to-date distressed total returns increase to 13.46% on Tuesday from 13.42% on Monday.

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